A new report on GOP presidential hopeful Mitt Romney’s corporate history has opened new a line of attack on his domestic job creation record (ABC) as he continues to face a tight race on the economy.
An investigative story by the Washington Post‘s Tom Hamburger says that while Romney ran Bain Capital, the firm invested in other companies that specialized in relocating jobs done by U.S. workers to new facilities in low-wage countries like China and India from call centers to the manufacture of computer parts.
The report runs counter to Romney’s campaign, which centers in part around his experience creating U.S. jobs, his plans to combat the toll competition for jobs overseas has taken in the U.S. economy, and his promises to bring jobs back to the United States and protect domestic employment by getting tougher with China.
The Romney campaign called the report a “fundamentally flawed” story that skirts explanation (Politico) of the difference between “outsourcing” and “offshoring,” or shipping jobs overseas.
The progressive blog Think Progress notes that, while the Romney camp is technically correct on how the Post article confused the two terms, it “doesn’t change the fact that Bain, under Romney, invested in companies whose sole purpose was to move jobs to other countries, directly countering the narrative that Romney has been trying to set.”
However, at Forbes, Dan Ikenson writes that Romney should defend himself and delve into the economics of “U.S. direct investment abroad” versus “shipping jobs overseas.”
“The vast majority of U.S. direct investment abroad (what the president calls “shipping jobs overseas”) goes to other rich countries (European countries and Canada), where the rule of law is clear and abided, and where there is a market to serve,” Ikenson said. “The primary reason for U.S. corporations establishing foreign affiliates is to serve demand in those markets – not as a platform for exporting back to the United States.”
The Atlantic’s David A. Graham says that outsourcing was a potent issue in the 2004 election and could hurt Romney in 2012, especially in Rust Belt swing states that have been hit hard by a bad economy and account for many electoral votes.
President Barack Obama’s campaign seized on the news, deploying senior campaign strategist David Axelrod on a conference call with reporters (The Hill), adding outsourcing criticism to stump speeches (USAToday), and churning out ads on the issue to run in swing states starting Tuesday (HuffPost).
For more on the candidates’ stances, check this issue tracker on The Candidates and the Economy.
Suggested Other Reading:
In a May report, the Brookings Institution looks at the slow growth of U.S. manufacturing jobs during the last two years, related geographic implications, and if it signals a renaissance for U.S. manufacturing and recovery from years of outsourcing or represents just a temporary respite from long-term decline.
— Gayle S. Putrich, Contributing Editor